Millbury civic leader, accountant faces embezzlement charges

MILLBURY 
A civic leader and local accountant faces charges that he embezzled and misapplied as a fiduciary more than $16,000 from a private trust for which he served as trustee.

Frank J. Gagliardi, 69, 37 S. Main St. Apt. B, will be arraigned in Central District Court in Worcester on Dec. 19. A summons was issued by the court Nov. 9 after a finding of probable cause for the charges.

Mr. Gagliardi is president of the Millbury Historical Society and is a sewer commissioner, a member of the Millbury Bicentennial Committee and the treasurer of the Michael A. Fresolo Foundation, among other volunteer roles. He owns an accounting and tax preparation business, Frank Associates, in Millbury.

He did not return phone calls for comment.

Mr. Gagliardi returned the money to the trust after the misapplication of money came to light, according to the police complaint, but the Worcester district attorney's office confirmed it is pursuing criminal charges.

According to court documents, Mr. Gagliardi served as a trustee on an account opened in 1991 for the Lyons Family Trust at Millbury Federal Credit Union.

A major asset of the trust was proceeds from the sale of the home of Isabelle Lyons, 91, according to Ms. Lyons' daughter, Karen Gagliardi.

Ms. Gagliardi was married to John Gagliardi, Frank's nephew, during the time Frank served as trustee. She said the irregularities in the trust were uncovered during her divorce proceedings in June 2011.

“That opened a can of worms,” Ms. Gagliardi said. “If I had never gotten divorced, we would never have known about it.”

Ms. Gagliardi and her sister, Judith Barrett, who lives in Florida, alleged that Mr. Gagliardi was sending them fraudulent financial statements during the two years or so in which he inappropriately withdrew money for his personal use.

The complaint filed by Millbury Police Detective Nicholas Fortunato said that Mr. Gagliardi wrote 23 checks against the Lyons Family Trust between Aug. 19, 2009, and April 15, 2011, totaling $20,141.42. One check, dated Jan. 30, 2009, in the amount of $16,463, was written to the Estate of Alfred J. Gagliardi.

The complaint continues that on June 20, 2011, Mr. Gagliardi wrote two checks from his personal checking account totaling $16,463, the amount that had been withdrawn from the Lyons trust.

Ms. Gagliardi confirmed that Frank Gagliardi was not authorized to use the trust money to pay his debts.

Mr. Gagliardi was removed as a trustee in June 2011.

Ms. Gagliardi said, “He's in charge of a lot of money for a lot of people.” She added that Mr. Gagliardi manages accounts for many elderly people in town.

“We were extremely shocked because he was trusted,” Ms. Barrett said, adding she has known Mr. Gagliardi for more than 40 years.

Sharon Anderson, treasurer of the Historical Society, said she was also shocked to hear of the allegations.

She said there had not been any unusual activity in the society's accounts.